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“I think the best case scenario is that the dollar only loses half its value.”

Thanks for the link, Jorge.

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I was surprised that he didn’t point out that, on his presentation, the listed means for development are almost opposite in importance to the goals, which could indicate why attempting to follow the same path once you’ve reached development leads only to stagnation.

Using his Gapminder tool, checked Costa Rica’s progress on GDP (graph after the text). Even knowing the effects that the Carazo administration had on our country, it was still shocking to see on the chart how far backwards we had ended up in terms of GDP.

Presenters, take notice: that’s how you give a talk on a dry subject.

Perhaps, even more tellingly, is the backwards-going line of our economic growth during those four years (Y axis is population in millions):

And since:

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Singaporean banks try to reassure local investors that they won’t be affected by the sub-prime mortgage problems in the United States. On France, their biggest listed bank, BNP Paribas, freezes $2.2 billion worth of funds and the European Central Bank injects around $130 billion into euro-zone money markets, trying to soothe things. Boy that’ll do wonders for inflation.

‘When the ECB starts being vocal about injecting liquidity, if they ever wanted to create a sense of panic that would be the way,’ said Tom Hougaard, chief market strategist at City Index.

Earlier, the European Central Bank said it had injected into the money market an unprecedented 94.84 bln eur in a move to meet a liquidity shortage amidst what it called ‘tensions’ in the euro area money markets.

And from Bloomberg:

“Today’s step by the ECB looks like a sign of panic,” said Sergi Martin, who helps oversee $9.6 billion at Credit Andorra in Andorra. “We might see more of this in the coming days.”

And on Technocrat, a reader relays an anecdote of how mortgage are having a dramatic effect on overall health:

Santa Clara county (south west of S.F.) has, for a few years now, suffered from little outbreaks of West Nile disease. Well, now the foreclosure rate is sufficiently high that a serious concern has become abandoned homes with unmaintained swimming pools in the yard, breeding mosquitos like mad.

It’s a small, small world.

PS: Of course, the Euro drops to the lowest it’s been in a while.

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The Chinese government has begun a concerted campaign of economic threats against the United States, hinting that it may liquidate its vast holding of US treasuries if Washington imposes trade sanctions to force a yuan revaluation.

Two officials at leading Communist Party bodies have given interviews in recent days warning – for the first time – that Beijing may use its $1.33 trillion (£658bn) of foreign reserves as a political weapon to counter pressure from the US Congress. Shifts in Chinese policy are often announced through key think tanks and academies.

Described as China’s “nuclear option” in the state media, such action could trigger a dollar crash at a time when the US currency is already breaking down through historic support levels.

It would also cause a spike in US bond yields, hammering the US housing market and perhaps tipping the economy into recession. It is estimated that China holds over $900bn in a mix of US bonds.

Here’s the original Telegraph article. Technocrat has an editorial comment by zogger that minces no words:

Housing is just a single manifestation of the over all problem, it just is one of the “pops” here that could happen. Over inflating the money supply to postpone this collapse point is what caused this along with the deliberate market and interest rate manipulations. Nothing is based on real productivity anymore, it is based on how much smoke they can blow in front of how many mirrors.

Boy is Iran going to pay for this one…

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I stopped by Torneca today to buy six screws of a specific size. As soon as I arrive at the cashier, their system goes down. A flustered lady singals a bored-looking fellow and asks him to write me a manual bill for the screws, each one worth 81 colones (about $0.15). The fellow disappears, blank bill in hand.

Five minutes later he returns triumphantly, having written on the bill “6 screws – 81 colones”. He hands it to the woman, and then the fun begins.

Woman: “That’ll be 81 colones.”
Me: “Are you sure?”
Woman: “Yes, look”, she replies, showing me the bill.
Bored Guy: “Oh, no, that’s 81 each…”
Woman (Confused): “But why didn’t you put the total in?”
Bored Guy (Apologetic): “Well… I didn’t have a calculator…”
Me, just wanting to get the hell out: “It’s OK, it’s 486 colones.”

It’s 6 times 8, you know, not like I just calculated the square root of pi to the 12th position and elevated to the power of the number of people in the store. Still the woman ignores me, probably thinking I’m trying to rip them off by pulling a number out of a hat, and proceeds to rummage through her stuff to find a calculator. After stabbing it with her chubby fingers, she turns back to me.

Woman: “That’ll be 480 colones.”

I hand her the 500 colones I have in hand. She gives me back my change. I check it – she just gave me 105 colones.

Me (showing her the coins): “You should have given me twenty.”

The Woman is absolutely flustered by now but, probably deciding to trust me, takes out 20 colones and hands them to me. Her eyes pop out of her head when I hand the 105 back. I didn’t bother to explain – she’s probably still trying to figure it out.

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Bernake needs to open the discount window. That’s how bad things are out there. Bernake needs to focus on this.

and

Bernake is being an academic. It is no time to be an academic.

and then completely loses it and screams:

HE HAS NO IDEA OF HOW BAD IT IS OUT THERE! HE HAS NO IDEA! HE HAS NO IDEA! I HAVE TALKED TO THE HEADS OF EVERY SINGLE ONE OF THESE FIRMS IN THE LAST 72 HOURS AND HE HAS NO IDEA OF WHAT IT’S LIKE OUT THERE! NONE! AND BILL POOLE HAS NO IDEA OF WHAT IT’S LIKE OUT THERE! MY PEOPLE HAVE BEEN ON THE BUSINESS FOR 25 YEARS AND THEY ARE LOSING THEIR JOBS AND THESE FIRMS ARE GONNA GO OUT OF BUSINESS AND HE’S NUTS! THEY’RE NUTS! THEY KNOW NOTHING!

Funny thing is that he’s advocating not a reasonable economy but for the Fed to show up and bail out the financial institutions like Bear Stearns that have gone way over their heads and stand to loose big in the current subprime mortgage meltdown.

Found via BoingBoing.

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John Allison, CEO of BB&T Bank, lays out his business philosophy arguing for the virtues of profits, self-interest and production. His definition of justice, one of the core values of his firm, is that those who produce more, get more. He argues that Bill Gates would do more for the world improving Microsoft than running his foundation and giving away money. Allison praises Atlas Shrugged and refuses to let his bank make loans to companies that use eminent domain to acquire property. Is this any way to run a company? Does Allison really run his company this way? How does he deal with the gap between his philosophy and our popular culture’s view of business and profits? Listen as Allison and host Russ Roberts discuss BB&T’s unusual business strategy.

Overall the EconTalk podcasts are both entertaining and enlightening, but so far this one is my favorite.

PS: This is the one I mentioned, Jorge.

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What most of these people actually mean, and what they never tell you, is that they’re afraid that these companies are just plain better. It’s not their magnitude that scares competitors here, but the fact that having actual competition would require them to get off their bloody asses and produce something that’s up to international standards.

Allow me to tell you a story.

I just started consulting again full time, and created a company with a team of close friends called Arquetipos. We have the vision that you either do things right or don’t do them at all, and that these should extend to every aspect of the company, specially those areas that involve communication with clients. As part of the process of building up the company’s identity, Rodolfo Dengo designed a gorgeous business card, and we set to finding a local printer to produce them. We had some optional items we could have lived without, such as infrared coating on only some sections of the card, but we were sure we could find someone to print them out locally without much fuss.

We went to three different local printers and asked them to get us some printing tests, something to convince us to go with them. We were expecting these would be their best work, geared towards winning us as clients.

We were wrong.

Each and everyone had serious problems: the text looked jagged, the colors had bled, the solid blue had streaks. At one place some cards had a brown gunk on them I’d rather not inquire about. Not a single one was even up to the level of the tests I printed with my $50 Pixma, much less being anywhere close to acceptable.

On our fourth attempt we found a provider who swore they could do everything we wanted, on professional quality. We requested a quote. It took them almost two week to get it to us, and they demanded we printed at least 2,000 cards, without them printing a sample first, and with no re-print if the results were sub-par.

At this point, had I found the right double-sided card stock, I would have done them in-house myself.

In the end we decided to try Overnight Prints, an online printing site. Rodolfo was unsure and asked if we should risk it. Why not? – I replied – We already know results here are going to be crap. We sent them our specs, including the Spot UV coating on the logo. They gave us a quote, way below anything we had found here. Their minimum lot requirements were lower as well. We paid via credit card, and waited.

Two days later the cards shipped. For days after that they were in Costa Rica. We opened the box, hoping for the best.

The cards were everything we expected, just like they had plucked them from Rodolfo’s mind – printed and delivered here faster than it took some companies to give us a quote, and at under 80% of the cheapest local cost.

We needn’t sign onto CAFTA for local printers to have a problem – they have already lost.

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Robert Reich says that, as a requirement for free trade deals, we should tell developing countries to “set a minimum wage that’s half their median wage.” The proposal raises two questions in my mind:

1. Does Reich pay his nanny, cleaning person, and gardener more than half the median wage of members of his family?

2. If not, should I refuse to buy his books?

Made specially timely by the fact that I’ve just read The Choice, a terse description of free trade versus protectionism.

Here’s his post, found via Marginal Revolution.

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“This deficit shows that much of our prosperity is based on borrowing rather than a true increase in production”. Couldn’t be stated any clearer.

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Enter the second problem, the L$ exchange markets are effectively rigged. At any given time over the past year or so, the SLL/USD exchange rate has hovered between about 250 and 300. That is, for every L$300 you earned, you could expect to get $1 USD. Now recall, there are supposedly hundreds of thousands of real dollars being spent daily; over L$250,000,000. Between Linden’s official exchange market and the private exchanges, all appearances suggest a large volume of L$ daily exchange trade.

The catch is, however, these headline rates only apply to small amounts. For small time buyers and sellers of L$ — be they virtual Johns paying up for sexy avatar escorts, or small time digital jewelry makers cashing out a couple hundred real dollars – this works well. Most of these people will use Linden’s official LindeX exchange, anyway. LindeX is actually not a virtual currency exchange market so much as it is an open auction, anyway. This means LindeX is not particularly useful for big trades.

[...]

As we scratched our heads trying to figure out if there weren’t a more clever way of disguising our trades, or perhaps creating our own in-game banks and exchanges in order to arbitrage the other direction, it suddenly dawned upon me.

This game was just a pyramid scheme.

SecondLife is not a dramatic taste of our future, in which markets are virtual, currency is free from government control, taxes are non-existent, and normal people can become real millionaires simply by clicking their mouse a few times.

SecondLife isn’t even a simple virtual economy, with legitimate buying and selling, and opportunity for those who would compete.

No, SecondLife is a classic pyramid scheme. Or, more of an Amway-like pyramid: partially legitimate, partially ponzi. Sure, there are plenty of legitimate SecondLife customers who just like to go there to get their kicks, spend a couple dollars, and be on their way.

Somebody in Slashdot commented that making money in your First Life isn’t easy, why would it be on Second Life? Good point, but it obviates the fact that Harrison didn’t have any problems making money – he had problems getting it out of the system.

Here’s the full article.

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The rankings employed criteria such as business freedom, tax rates, inflation, property rights and freedom from corruption.

The United States comes in fourth, after Hong Kong, Singapore and Australia. Looking at the economic freedom map it seems that El Salvador is economically freer than the rest of Central America, including Costa Rica – not that surprising, considering that Costa Rica is seriously lagging in the deregulation process, and they apparently wipe the floor with us in the “Banking and Financial” area.

Via Technocrat. Very interesting note from a Hong Kong resident on the thread.

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Regardless how wise a move it is, it won’t be cheap. I guess we can forget about the dollar reversing its slide.

Hi, NSA! I love you too.

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From the article:

The one social factor that researchers agree is consistently linked to longer lives in every country where it has been studied is education. It is more important than race; it obliterates any effects of income.

Interesting piece, but as Tyler says, it jumps too quickly to a conclusion of causation, and immediately starts analyzing the effects of something they haven’t yet proven.

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[...]

“The United States is bankrupt,” he insisted. “With less than one-tenth of the actual deficit being reported each year, a cumulative negative net worth exceeding $50 trillion has built up in stealth to where the total obligations of the U.S. government are now more than four times our annual gross domestic product.

And then people wonder why silver and gold are on a tear.

Read the whole article here.

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